Report: Tech creating black, Hispanic underclass

Eulogia Figueroa, 49, a janitor at Apple, in front of the Apple campus in Cupertino, Calif. She earns $14.94 an hour, barely enough to scrape by in Silicon Valley.(Photo: Martin E. Klimek for USA TODAY)

SAN FRANCISCO — Silicon Valley is creating a mostly black and Hispanic underclass of service workers who are paid low wages and few benefits to work inside some of the world's wealthiest companies, says a report released Monday by Working Partnerships USA.

Blacks and Hispanics in Santa Clara County are 28% of the work force yet make up a tiny percentage of professionals inside technology companies.

Where they dominate instead: the ranks of service workers who struggle to make ends meet in pricey Silicon Valley.

Four out of 10 security guards, seven out of 10 janitors and three-quarters of grounds maintenance workers in Silicon Valley are black or Hispanic, according to the report "Tech's Diversity Problem: More Than Meets the Eye" from Working Partnerships USA, a nonprofit that advocates for affordable housing, higher wages and access to health care.

Working Partnerships USA is calling on major technology companies to increase wages and benefits.

"The service workers who are a critical part of the industry's business model deserve to make a living wage and share in the wealth and prosperity of the industry, just as the engineers and coders do," said Derecka Mehrens, executive director of Working Partnerships USA. "These numbers represent real people: black and Hispanic workers who work hard but remain in poverty. Their jobs make this valley work. The people who protect and serve Silicon Valley's new elite need deserve dignity in their own occupations."

But they are not on the payroll at Apple, Facebook or Google. Service workers are employed by contract companies and don't receive the pay and perks that technology companies shower on employees.

"This is the new Silicon Valley model. Companies have two work forces: their professional work force and their contract work force," said Russell Hancock, president and CEO of Joint Venture Silicon Valley. "It's a bifurcated system. You have the high-end work force: the architects, coders and sophisticated PhDs, and you invest heavily in them and feed them and create this cocoon-like environment that answers their every need. And then, on the other hand, you need armies of people doing basic functions, so you set up a separate and distinct system for them."

The effects of that two-tiered system — declining wages, eroding health and safety conditions and a lower standard of living — are rippling through the economy, said David Weil, author of The Fissured Workplace.

A recent study by the U.S. Conference of Mayors showed that San Jose had the fewest middle income households of the top 357 metropolitan areas.

Nearly a third of households in Santa Clara County don't earn enough to be economically self sufficient, according to the Insight Center for Community Economic Development. Thirty-six percent of black households and 59% of Hispanic households in Santa Clara fall below that standard.

In Santa Clara County, the median wage for software developers is $63.62 an hour while landscaping workers earn $13.82 an hour, janitors $11.39 and security guards $14.17, according to the California Employment Development Department.

A full-time janitor would have to work over time hours to afford the average rent of $2,321 for an apartment in Santa Clara County, according to Working Partnerships.

Benefits are also sparse.

Whereas 88% of computer and math jobs and 85% of engineering and architecture jobs in Santa Clara County offer sick pay, 59% of building and grounds cleaning jobs and 55% of private protective service jobs do not, according to the Institute for Women's Policy Research.

Working Partnerships says a $5 an hour pay increase would be enough to lift a security guard to self sufficiency and would amount to a rounding error for technology companies pulling in record profits.

Eulogia Figueroa, a 49-year-old mother of two who works as a janitor on Apple's Cupertino, Calif., campus, said she would like to see service workers get a raise and more benefits.

"All workers in the tech industry from all levels deserve good jobs and the opportunity to provide for their families," Figueroa said.